Indiabulls Real Estate to merge with certain Embassy Properties:
On 31st January 2020, the board of Indiabulls Real Estate in-principally approved the proposal of the merger of certain ongoing, completed and planned residential and commercial projects of Embassy Property Developments Private Limited with IBREL.
Embassy is in discussions with financial investors such as The Blackstone Group Inc. and others to raise up to $200 million before the Merger. This equity investment of USD 200 million will bring significant cash in the merged entity i.e. IBREL + Embassy.
Under the proposed Merger, certain ongoing, completed and planned residential and commercial projects of Embassy will get merged and stand transferred to IBREL. Some of Embassy assets are presently owned by entities managed and controlled by it jointly with Blackstone, for which it is in discussions with Blackstone to contribute such assets as part of the merger transaction.
Under the proposed Merger, IBREL will issue its equity shares of face value of INR 2 each to the shareholders of Embassy, in accordance with the swap ratio as would be approved by the Board of both the Companies, resulting into the following shareholders segment in the Merged IBREL, post effectiveness of the proposed Merger:
(i) IBREL’s existing shareholders
(ii) Embassy shareholders’ i.e. Embassy promoters, Blackstone / financial investor(s) etc.
The proposed Merger is aimed to be achieved through a cashless scheme of amalgamation.
Current Financial Position of Indiabulls Real Estate:
CMP (07/02/2020): Rs 92.5
Face Vale: Rs 2
Market Cap: Rs 4205 Crores
52 Week High /Low: Rs 151/38
Promoter’s Holding: 23.38%
Embassy Property Developments Pvt. Ltd. holds 13.89% of the Company
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INDIABULLS REAL ESTATE |
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| Year | Equity Capital | Net Worth | Long Term Debt | Short Term Debt | Total Sales | PAT | BV | EPS | P/E | P/BV |
| Rs Cr. | Rs Cr. | Rs Cr. | Rs Cr. | Rs Cr. | Rs Cr. | Rs. | Rs | |||
| H1 20 | 90.93 | 3546 | 1478 | 2820 | 1971 | 181 | 78.0 | 4.0 | 23.2 | 1.2 |
| FY 19 | 90.13 | 3998 | 3405 | 1015 | 5222 | 504 | 88.7 | 11.2 | ||
Post Merger Equity Position:
Proposed Investment Amount: $ 200 million or Approximately over Rs 1400 crores. By issuing fresh capital the intent is to transfer the management of the company to Embassy allowing Sameer Gehlaut to reduce his stake and allow him to conduct business in the financial services space.